“We believe that time spent with other media (TV, radio, magazines, etc.)...will increasingly be cannibalized by esports playing and viewing as the 18- to 25-year-old cohort ages up over time,” analyst Laura Martin wrote.

The analyst defines esports as gamers competing in front of an audience while being streamed to viewers and fans. She cited how one-third of 18- to 25-year-olds globally spend more than one hour a day playing videogames, and 395 million people watched esports last year, according to Newzoo.

Martin noted how Newzoo predicts the esports audience will rise 14% annually to 645 million by 2022. In addition, the research firm estimates esports revenue will increase by 22% to $1.1 billion this year.

Here are two Buy-rated videogame stocks Martin recommends that will benefit from this trend:

“What we like most about ATVI is that it owns all of its IP [intellectual property] and manages large, global, superfan communities,” Martin wrote. “Additionally, it has diverse revenue streams with big moats based on hit videogame franchises.”

The analyst noted the success of the publisher selling teams in its Overwatch and Call of Duty esports leagues.

Martin cited the potential esports opportunities for EA’s FIFA, Madden, Battlefield, and Apex Legends game franchises. She said more than 20 million gamers competed in the company’s FIFA tournament, whose final drew 30 million viewers.

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